Minister of Employment and Labour Thulas Nxesi has filed an urgent court application to set aside the R5 billion Thuja Capital-Unemployment Insurance Fund (UIF) job creation contract.
The deal between the UIF and the company has been marred by an R500m bribery allegation brought by businessman and Thuja Capital CEO Mthunzi Mdwaba.
Nxesi and two other ministers were accused by Mdwaba, who is also the former chairman of Productivity SA, of attempting to solicit a R500 million kickback on the R5 billion contract.
Mdwaba says he was fired for his refusal to grant the bribes.
Nxesi wants his name cleared as he explains the move to approach the High Court in a bid to set aside the R5 billion Thuja Capital contract.
“There is nothing that could undermine the integrity of our democracy and system of constitutional governance more than false allegations that a group of cabinet members have, in a corrupt scheme, deliberately conspired to frustrate the implementation of a viable job creation project by demanding the payment of corrupt fees from a service provider. These allegations will now be tested in court. Mdwaba’s allegations of seeking bribes against myself, and others, are false and unsupported by any actual evidence. Let me be clear ‘I categorically deny these recent allegations of corruption’.”
He says the contract was entered into in December 2022 by businessman and Thuja Capital CEO Mthunzi Mdwaba and the then-Director-General of the Department, Thobile Lamati.
According to Nxesi, the agreement flouted labour processes and went against the Public Finance Management Act and the Unemployment Insurance Act.
“Whereas the agreement was signed, it did not comply with applicable law. In terms of section 54(2) of the Public Finance Management Act (PFMA), 1999 as amended, read with the National Treasury Practice Note on “Applications under Section 54 of PFMA, by Public Entities”, dated 13 July 2006, such an agreement needed to be approved by the Minister of Employment and Labour and the Minister of Finance,” Nxesi adds.
South Africa has one of the highest unemployment rates in the world.
The Department of Employment and Labour says while the Thuja UIF matter plays out in the courts, the government remains on track to roll out the Labour Activation Programme that will see jobs created.
Acting Director-General at the Department of Employment and Labour, Dr Alec Moemi says, “We are revamping the whole LAP programme, we are growing it, we are much bolder working with the Treasury to avail more resources to make sure that we grow from the current 2,8 to 3 billion a year and we should be bold enough to go higher much higher, we are ramping up capacity with a target to creating 2 million work opportunities in the near future and within the immediate future we should do that we intend to ramp up this over the remainder of the MTF cycle to almost 10 million work opportunities at an estimated cost of about R30 billion pulled together from all of government and nine sector departments involved in this plan.”
The Minister has described Mdwaba as bitter. He says the forensic investigation into the matter also revealed wrongdoing, with extracts of the forensic report expected to form part of their court challenge.
Mdwaba was not available for comment.
The Labour and Employment Minister emphasises that the ball is now on the High Court’s side to put the Thuja/UIF contract to rest.
The department also approached the President to issue a specific proclamation to have the contract investigated by law enforcement agencies and to give Professor Mdwaba the platform to prove his corruption claims.
Video: Minister Thulas Nxesi briefs the media on R5 billion agreement with Thuja
